Married Put

A protective put is insurance for a stock you own. You buy a put under your shares, and if the stock falls below the strike, the put gains value and covers the loss from there down. If the stock rises, you keep the upside, minus what the insurance cost. It’s also called a “married put” when you buy the shares and the put together. How it works You own 100 shares. You buy one put, usually a little below the current price. Below the put’s strike, every dollar the stock loses, the put gains. Above it, you’re simply long the stock, minus the premium you paid. Max profit, max loss and break-even Protective put Max profit Unlimited, minus the premium Max loss (Your share price − put strike) + premium Break-even Your share price + premium Worked example You own 100 shares of Apple ($AAPL) at $150 and you’re worried about a correction. You buy a six-month $140 put for $4 a share ($400). ...